Even though Asian currencies declined Wednesday due to traders’ moderating bets on possible rate cuts in the United States this year, the Indian rupee saw little movement. This was due to an increase in Treasury yields.
As of 10:15 a.m. IST, the rupee was trading at 83.33 (Dh22.7), hardly moving from its closing of 83.3175 during the previous session.
Tuesday saw a 0.8% increase in the dollar index and an 8 basis point increase in the yield on the 10-year U.S. Treasury to 3.94% as investors reduced their expectations of a Federal Reserve interest rate drop.
According to CME Group’s FedWatch tool, investors are now pricing in a near 75% chance of a Fed rate drop in March, down from over 85% a week earlier.
Most Asian currencies saw declines, with the Malaysian ringgit and Korean won seeing the most significant drops, at 0.6% and 0.5%, respectively.
According to a foreign bank foreign exchange dealer, the USD/INR exchange rate is seeing good selling demand, around 83.35.
Due to predictions that the Reserve Bank of India (RBI) will step in to limit losses, traders anticipate seeing little movement in the value of the rupee.
